Nov. 8 (Bloomberg) — Allianz SE, Europe’s second-biggest insurer by market-value, posted a 2 billion-euro ($2.6 billion) loss and said it may miss operating profit forecasts for this year and next because of the turmoil in financial markets.
Allianz had a net loss including discontinued operations in the third quarter, compared with net income of 1.9 billion euros a year earlier, the Munich-based insurer said in a statement today. That was less than the 3.85 billion-euro estimate of 14 analysts surveyed by Bloomberg. Net income from continuing operations, which reflects the sale of Dresdner, was 545 million euros, the company said, missing analysts’ estimates of 782 million euros.
“Without a major equity market recovery, the operating profit outlook of 9 billion euros before banking for this year and next year cannot be reached,” Allianz Chief Financial Officer Helmut Perlet said in the statement.
Allianz, led by Chief Executive Officer Michael Diekmann, agreed on Aug. 31 to sell Dresdner Bank to Frankfurt-based Commerzbank AG for cash and stock. Commerzbank shares lost about 40 percent of their value in the month ended Sept. 30. Discontinued operations, which reflect the sale of Dresdner effective from Sept. 1, accounted for “transaction-based impairments according to IFRS 5” of 1.4 billion euros as well as for a net loss of 1.2 billion euros from Dresdner’s operations, Allianz said.
Allianz has said that its remaining stake in the combined Commerzbank-Dresdner will be almost 30 percent, making it the largest shareholder. The final size of the stake will depend on the exchange ratio of Commerzbank-Dresdner shares.
Phased Purchase
Commerzbank agreed to buy Dresdner in two steps, initially acquiring 60.2 percent with cash and stock before yearend. Commerzbank plans to buy the remainder by the end of 2009 with new shares stemming from a capital increase. Allianz reiterated in today’s statement that the sale of Dresdner is “on track.”
Allianz CEO Diekmann, 53, put Frankfurt-based Dresdner up for sale this year after subprime-related losses at the lender’s Dresdner Kleinwort securities unit eroded profit. Dresdner, which Allianz bought for 23.5 billion euros in 2001, posted its fifth straight loss in the latest quarter as it “continued to suffer from weak and volatile markets,” Allianz said.
Dresdner had an operating loss of 835 million euros in the third quarter compared with an operating profit of 87 million euros a year earlier, Allianz said.
Capital Base
Allianz’s capital base “remains on a high level” with shareholder’s equity of 37.5 billion euros at the end of September compared with 47.8 billion euros a year ago, it said. Allianz’s solvency ratio, “net of a dividend accrual of 1.6 billion euros,” stood at 157 percent at the end of the quarter.
The decline in financial markets worldwide hit the insurer’s operating investment result with impairments of 1.6 billion euros, it said.
Allianz shares declined 55 percent since the beginning of the year in Frankfurt trading, giving the insurer a market value of 29.8 billion euros. The decline compared to a 42 percent decline of Paris-based Axa SA, which has a market value of 32.9 billion euros.
To contact the reporter on this story: Oliver Suess in Munich at [email protected]
Last Updated: November 7, 2008 18:34 EST
By Oliver Suess
Source: Bloomberg